Thousands of Holden workers are expecting to find out their fate on Tuesday morning, many weeks after their US head office in Detroit decided to cut them adrift.

Holden managing director Mike Devereux appears before the Productivity Commission on Tuesday and many within the car industry believe he will use the occasion to tell them that time has run out for the motoring giant.

End of the road?: Thousands of car workers await their fate. Photo: Getty Images

If Holden pulls out, Toyota Australia, which employs 4200 people directly, is likely to follow suit because component suppliers for both companies would become unviable.

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It comes as a government figure revealed there was no support for extra assistance for the car manufacturing sector within the federal government with just one minister out of 19, Industry Minister Ian Macfarlane, arguing the case to keep the quintessentially Australian carmaker afloat.

A Holden company source said that local management had received a stay of execution while the attitude of the newly elected Coalition government had become clearer. That time has now passed and an announcement of the company's intention to depart could come as early as Tuesday.

The Productivity Commission is due to make an interim report on car assistance before Christmas and a final report in the first quarter of 2014.

But that timetable, and the clearly expressed attitude of the government, have apparently cemented the company's resolve to pull the pin on the Australian manufacturing plants at Elizabeth in South Australia and Fishermans Bend in Victoria.

The closure has potentially devastating consequences for thousands of workers directly employed by Holden and could send the economies of both states, where the bulk of a combined 50,000 jobs reliant on the automotive industry are located, tumbling into effective recession.

No comfort: Treasurer Joe Hockey. Photo: Alex Ellinghausen

The opposition went on the attack over the closure on Monday dedicating nearly all of its questions to the government on what was was being done to protect the sector and save local jobs.

‘‘The future of the car industry is in the hands of the car industry, and it’s in the hands of the car industry in the same way that it was under Labor, because it was February 2008, from memory, when Mitsubishi closed when Labor was in government,’’ he said.

Fairfax Media understands Toyota has been watching the situation unfold with increasing trepidation, aware that its vast network of suppliers would collapse without the Holden orders.

While officially it is playing its cards close to its chest, industry experts say it would have no choice but to fold its tent, bringing an end to an industry that has employed hundreds of thousands of Australians over decades, and has formed the bedrock of a wider engineering and manufacturing skills base of the economy.

While a precise figure has not been released, it is understood the two remaining manufacturers, Holden and Toyota, wanted Canberra to commit to maintain an extra $300 million per year of assistance split roughly 50/50.

Proponents of the subsidy – from unions to the opposition and the carmakers themselves – argue that every car available in Australia at present was built using some government subsidy. But it appears the argument for a local car industry has already been lost, with GM deciding to rationalise its operations in China and South Korea – where its Daewoo brand has greater growth potential.

A report in Monday’s Wall Street Journal claimed GM executives had decided to close the Australian plants in South Australia and Victoria and cut production in South Korea by 20 per cent as the US car giant repositions for life after government investment – made necessary during the global financial crisis as both GM and Chrysler teetered on the edge of bankruptcy.

53 comments

Holden is folden, so the song's a changin' -"football, meat pies, kangaroos and foreign cars"

Commenter

Tin

Date and time

December 10, 2013, 6:45AM

I have no issue with the demise of either Holden or Toyota, as long as the Government removes all tariffs and import restrictions on overseas built vehicles. We should, as the Germans do, be able to buy a BMW for the price of a Holden.

Commenter

Grahame

Date and time

December 10, 2013, 6:53AM

You do realise that German people (And the USA for that matter) pay 5 times per capita more in government assistance to their auto industry than Australians do? Why? Their government is smarter than ours.

Commenter

Gilly

Location

Melbourne

Date and time

December 10, 2013, 8:44AM

They buy Opels for the price of Holdens, not BMWs.

Commenter

Steve-O

Location

Sloane Square

Date and time

December 10, 2013, 8:51AM

Grahame,You have no idea. Tariffs are 5%. The difference in price is because BMW can charge that much, because people will pay it.Pricing has nothing to do with what it costs.So when our local manufacturing industry collapses (because you wanted to buy a cheap BMW), and all you have in your price bracket is a Daewoo manufactured in Thailand or China, which will be priced the same as a Holden is now, will you be happy?I won't be.We make a much better car here than China will for years to come.

Commenter

Pat

Location

Melbourne

Date and time

December 10, 2013, 8:53AM

as the Germans do? .. You mean protect your car industry with heavy subsidies ,invest in training , technology and innovation even through tough years , frustrate imports and foreign competitors with sneaky EU rules ,management and government working WITH unions not against them and treat all other countries as complete idiots if they don't do the same .. yeah ok do as the Germans do .

Commenter

Dan

Date and time

December 10, 2013, 9:42AM

The government should ask the unions to take over the car industry because it is the unions who have stuffed the business with pushing wages so high. Let us see how they could run the business instead of just sitting on the side line destroying companies. The unions have a lot to answer for just look at the HSU for an example and also the actions of the former PM

Commenter

Joe blow

Date and time

December 10, 2013, 7:00AM

Who do you think buys cars?

Low wages means low disposable income which means one Australian company after another closing it's doors because nobody can afford to buy their product.

Commenter

Goresh

Date and time

December 10, 2013, 8:38AM

The unions (and workers) have a lot to answer for, but so does management. The unions made unreasonable demands and priced their members out of the market. Management sat by and submitted to the unions. Government looked on. They are all to blame.Government, management and the unions all need to be part of the solution. The unions need to start caring about productivity, management needs to run the outfit like a business, and government should not pay money to build cars that people are no longer buying.

Above all - the workers should not be passive in this. They should be going to their unions and demanding change. Do they want and end to their current careers, or not?

Commenter

G

Date and time

December 10, 2013, 8:38AM

Spot on Joe Blow. It's been a cess pit of handouts from day one, with the Unions getting on borad as well.